In addition to their bone building properties, osteoblasts have been implicated in hematopoiesis by affecting renewal and expansion of hematopoietic stem cells (HSCs). More recently, osteoblast precursors have been involved in the fate of another stem cell, the leukemia blast. We have found that an activating mutation in canonical Wnt signaling in osteoblast precursors disrupts hematopoiesis in mice by altering the differentiation potential of HSC progenitors to the myeloid lineage and accumulation of granulocyte/monocyte progenitors. Concomitantly, B- lymphopoiesis is compromised. This phenotype is reminiscent of human myelodysplasia and eventually leads to the development of acute myeloid leukemia (AML) and early lethality. We hypothesize that stabilization of b-catenin in osteoblast precursors leads to AML development in a Notch signaling-dependent manner. Additional and independent events leading to oncogenic transformation of HSCs may involve chromosomal aberrations and epigenetic alterations. This application proposes to establish that osteoblast-specific activation of b-catenin is responsible for dysfunctional hematopoiesis and AML development. In addition, it will investigate the involvement of Notch signaling in mediating the leukemogenic properties of b-catenin activation in osteoblasts. Finally, it will evaluate the nature of the malignant transformation signal by examining changes in gene expression-regulation and the presence of genetic and epigenetic abnormalities in the HSC population. These studies may identify the osteoblast, as a determinant of AML.